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Buy up of Panalpina may turn into bidding war

DSV's US$4 billion bid for Panalpina may trigger a 'bidding war' that could oust the Danish company out from the bid for the freight forwarder, according to consultant Transport Intelligence (Ti)

Buy up of Panalpina may turn into bidding war

DSV's US$4 billion bid for Panalpina may trigger a 'bidding war' that could oust the Danish company out from the bid for the freight forwarder, according to consultant Transport Intelligence (Ti)

22 January 2019 - 19:00

DSV's US$4 billion bid for Panalpina may trigger a 'bidding war' that could oust the Danish company out from the bid for the freight forwarder, according to consultant Transport Intelligence (Ti).

Panalpina's number two shareholder Cevian Capital, with a 12 per cent stake, has been critical of Panalpina chairman Peter Ulber's rejection of takeover offers.



However, Mr Ulber has already announced that he would not stand for re-election as chief executive citing a conflict of interests given that he is chairman of Panalpina and is also on the board of the Ernst Goehner Foundation that holds a 40 per cent stake in the company.



The Ernst Goehner Foundation has 'never been attracted to the prospect of selling the company,' practice leader Thomas Cullen was quoted as saying in a report by London's Air Cargo News, with Mr Cullen pointing to rumours that other companies were also interested in buying Panalpina, particularly Kuehne + Nagel.



'Perhaps the new offer has been motivated by DSV's perception that this has now changed and the ferocious criticism of the Foundation and Panalpina's management by other shareholders has changed minds,' Mr Cullen wrote.



The UK's Financial Times said Cevian Capital typically looks to sell out after five to ten years of investment. It first bought a stake in Panalpina nine years ago.



'Panalpina will not only catapult DSV into being one of the leading freight forwarders in the world but will also reduce its exposure to the European market to around 60 per cent of sales,' said Mr Cullen.



Mr Cullen continued: 'If DSV succeeds in an acquisition of Panalpina it will continue the company's transformation.



'Buying UTi a couple of years ago gave the company a presence in a string of emerging markets as well as the US.'



According to Mr Cullen: 'The price offered by DSV is the equivalent of $4.1 billion and there are suggestions that this is not very generous to Panalpina shareholders, thus tempting other potential buyers and triggering a 'bidding war'.



'DSV is a highly profitable company with strong credit lines, however, it also has a record of avoiding overpaying for its purchases. It may simply be elbowed out of the way by more extravagant rivals.'


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